Managing Customer Relationships

Why did I choose this resource?

I chose this resource to study the importance of customer relationships and how to manage them.

What did you learn from it?

I learned the steps and processes of IDIC and how to implement them. I also discovered the best metrics to use to demonstrate measurable results.

Key Knowledge

• Traits of Relationships
  • Mutuality – pay attention and respond
  • Interactivity – communication
  • Iterative – grows or deteriorates
• IDIC – four steps of the customer relationship
  • Step 1: Identify
    • Definition – define customer identifier; name, address, phone number, or customer number
    • Collection – gather data; credit card, loyalty card, web contact, or RFID tags
    • Linking – associate individual customer’s data to his or her identifier
    • Integration – data shapes all customer transactions or contacts
    • Recognition – create mechanism to ensure customer is recognized and remembered during every contact
    • Storage – save information in databases
    • Updating – maintain current information
    • Analysis – study customer data in context
    • Availability – access to customer information
    • Security – protect customer data from unauthorized persons
  • Step 2: Differentiate
    • Customers who cost less – higher margin and higher value
    • Customers who use more high-margin products or services – higher value
    • Other metrics include:
      • needs
      • buying patterns
      • lifestyles
      • other relevant characteristics
  • Step 3: Interact
    • Implicit and explicit assumptions
    • Understandings
    • Both parties must:
      • identify themselves
      • participate voluntarily
      • accept the possibility of a change to their approach, understandings, or attitudes
  • Step 4: Customize
    • Four kinds of customization.
      • Adaptive – customer may alter the product
      • Cosmetic – offer color choices or personalization (name or company logo)
      • Collaborative – company communicates with client to create precise products for the clients specific needs
      • Transparent – provide unique products for a client without overtly stating the products are specialized.
• Metrics and Measurements
  • Customer equity – total lifetime value of a customer or of all customers
    • Comprised of:
      • Value equity – worth of the product or service to the customer
      • Relationship equity – the tendency of the customer to stay with the brand
    • Financial Value
      • Cross-selling opportunities
      • Lower costs
      • Lower attrition
      • Quicker cycle times

How are you using what you learned?

I am using what I learned to evaluate our customer relationships and make changes or improvements where necessary.

Key Changes / Key Actions

• Evaluate each customers relationship with Anant
• Use IDIC

Source

• Name : Managing Customer Relationships
• Author : Don Peppers and Martha Rogers
• getAbstract.com: Link to Book